Question 1

Theta Company determines that a $6,300 account receivable from CorpCo is uncollectible and writes off the account using the direct write-off method on June 16. On August 21, CorpCo pays the $6,300 to Theta Company.
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Journalize the entry for the reinstatement of the account receivable and receipt of cash on August 21. You may omit posting references. $$\begin{array} { | c | c | c | c | c | } 
\hline && { \text { Journal } } \
\hline \text { Date } & \text { Description } & \text { Post Ref. } & \text { Debit } & \text { Credit } \
\hline & & & & \
\hline & & & & \
\hline & & & & \
\hline & & & & \
\hline
\end{array}$$

Accepted Answer

The answer of Theta Company determines that a $6,300 account...

Question 2

When the allowance method is used to account for uncollectible accounts, Bad Debts Expense is debited when

Accepted Answer

A)   a customer's account becomes past due
B)   an account becomes bad and is written off
C)   a sale is made
D)   management estimates the amount of uncollectiblesE) A) and B)
F) A) and C)

Question 3

Under the allowance method of uncollectible accounts, the adjusting entry to estimate the amount that will become uncollectible affects the accounting equation by

Accepted Answer

A)   increasing assets and increasing liabilities
B)   increasing liabilities and decreasing stockholders' equity (expense) 
C)   decreasing assets and decreasing stockholders' equity (expense) 
D)   decreasing assets and increasing stockholders' equity (revenue) E) B) and C)
F) A) and B)

Question 4

At the end of the current year, Accounts Receivable has a balance of $550,000; Allowance for Doubtful Accounts has a credit balance of $5,500; and sales for the year total $2,500,000. An analysis of receivables estimates uncollectible receivables as $25,000.
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Determine (a) the amount of the adjusting entry for bad debt expense; (b) the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense; and (c) the net realizable value of accounts receivable.

Accepted Answer

The answer of At the end of the current year,...

Question 5

Trade receivables occur when two companies trade or exchange notes receivable.

Accepted Answer

A) True 
 B)False

Question 6

Under the direct write-off method of uncollectible accounts, if a written off account is later collected, the effect on the accounting equation is

Accepted Answer

A)   an increase in assets and an increase in liabilities
B)   an increase in liabilities and a decrease in stockholders' equity (expense) 
C)   a decrease in assets and an increase in stockholders' equity (expense) 
D)   a decrease in assets and a decrease in stockholders' equity (expense) E) B) and D)
F) All of the above

Exam 8: Receivables

When the allowance method is used to account for uncollectible accounts, Bad Debts Expense is debited when

Correct Answer
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Correct Answer
verified

Trade receivables occur when two companies trade or exchange notes receivable.

Correct Answer
verified

Under the allowance method of uncollectible accounts, the adjusting entry to estimate the amount that will become uncollectible affects the accounting equation by

Correct Answer
verified

Correct Answer
verified

Under the direct write-off method of uncollectible accounts, if a written off account is later collected, the effect on the accounting equation is

Correct Answer
verified

Exam 8: Receivables

When the allowance method is used to account for uncollectible accounts, Bad Debts Expense is debited when

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Trade receivables occur when two companies trade or exchange notes receivable.

Correct AnswerverifiedShow Answer

Under the allowance method of uncollectible accounts, the adjusting entry to estimate the amount that will become uncollectible affects the accounting equation by

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Under the direct write-off method of uncollectible accounts, if a written off account is later collected, the effect on the accounting equation is

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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